December 13, 2021
Take a look across the country. Almost everywhere, including Amazon, Starbucks, UPS, IBM, and many more, there is a labor shortage along with a resulting hike in wages aimed at attracting and retaining workers.
Basic economics tells us when there’s an increase in demand for workers and there’s not enough supply, two things tend to occur – unfilled jobs or higher wages. Right now, we have both.
At the end of August there were 10.4 million jobs available in the U.S. That was the second highest level ever, after July’s 11.1 million. Of course, that record was set after new all-time highs in May and June.
Adding to this problem is The Great Resignation, where record numbers of people are leaving their jobs. They’re called “quits” in the U.S. Bureau of Labor Statistics (BLS) data.
In August 2020, 3 million Americans called it quits. That was 2.1% of the workforce. In August 2021, 4.3 million quit. That’s a jump of 43% over the year prior and equivalent to 2.9% of all employees. It was more than ever before in a single month.
A key ingredient to the U.S. economy – foreign workers – has been hurt too. BLS data shows the foreign-born labor force in the U.S. has barely grown since 2016. Travel and border restrictions have made things worse.
Frankly, this is an odd labor environment we find ourselves in right now. However, time could help it normalize.